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Encyclopedia Upgrades and scaling · Entry 214

Lightning submarine swaps: moving between channels and on-chain funds

Theme
Upgrades and scaling
Sources
2 cited records
Reading time
About 3 minutes
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Substantive update
In this article

At a glance

Key facts

Key facts for Lightning submarine swaps: moving between channels and on-chain funds
FactDetailSource
ConnectionLinked hash and time conditions[1]
UsesRebalance between on-chain and Lightning funds[1]
CostsCan include service, routing and miner fees[2]
01

The same secret links two payments

In the documented flow, an on-chain contract can be claimed by the intended party with a valid signature and the required secret. The Lightning payment reveals that secret when it settles. If the swap fails, the contract’s timeout permits the designated refund path.

The parties must verify the amounts, conditions and deadlines before committing funds. A timeout is a spending condition, not a promise that a service will refund an account at an exact wall-clock moment.

02

Add every fee category before comparing quotes

Imagine a swap that delivers 100,000 satoshis to the destination and separately charges 500 for service, 100 for routing and 800 for the on-chain claim. Under that stated fee arrangement, the total cost is 1,400 satoshis and the sender’s total outlay is 101,400.

A real service may deduct fees from the stated amount or bundle some categories. Inspect whether the displayed number is the amount sent, the amount received or an estimate. These figures are illustrative, not a current Loop quote.

03

A failed swap can still leave a transaction fee

After an on-chain funding transaction confirms, recovering through a timeout path can require another transaction. Funds may be temporarily locked, and the recovery transaction costs a fee. Some arrangements also include an upfront charge.

Check how the wallet preserves recovery information and monitors deadlines. The swap’s atomic design addresses the exchange conditions; it is not a guarantee against bugs, incorrect parameters or missed claim opportunities.

Direct answers

Questions people ask

Do submarine swaps create additional bitcoin?

No. They exchange control of existing on-chain and Lightning balances under linked conditions. The service may charge fees for making that exchange.

Does a failed swap always cost nothing?

No. Funding and recovery transactions can pay miner fees, and the agreed service terms may include an upfront charge. Review the failure path as well as the success quote.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

A submarine swap exchanges an on-chain Bitcoin payment for a Lightning payment, or the reverse, using linked conditions. The same secret connects the two sides, while a timeout provides a recovery path if the swap fails. This can move liquidity without closing a channel. The design reduces a particular risk of one side taking both payments, but it does not remove fees, time-sensitive actions, software assumptions or the possibility of delayed recovery.

Educational explanation. Product-specific behavior is scoped to the cited documentation, checked 2026-10-02.

Scope: Bitcoin · data through 2026-10-02. Verification: verified · 2026-10-02T19:29:20.637Z.

Link to this claim
Connection: Linked hash and time conditions

Scope: Bitcoin · data through 2026-10-02. Verification: verified · 2026-10-02T19:29:20.637Z.

Link to this claim
Uses: Rebalance between on-chain and Lightning funds

Scope: Bitcoin · data through 2026-10-02. Verification: verified · 2026-10-02T19:29:20.637Z.

Link to this claim
Costs: Can include service, routing and miner fees

Scope: Bitcoin · data through 2026-10-02. Verification: verified · 2026-10-02T19:29:20.637Z.

Link to this claim
Revision history
  1. — First publication after primary-source research and separate automated verification.

Source register

Sources and references

Retrieval dates and locators are recorded individually.
  1. Understanding Submarine SwapsLightning Labs

    Conditional on-chain/off-chain swaps and timeout refund paths.

    Locator: Three steps of a Submarine swap; 1. Generate a bitcoin smart contract; 2. Generate and pay a Lightning invoice; 3. Claim bitcoin from the smart contract · Version / scope: Pinned Lightning Labs documentation revision; LND/Loop implementation scope · Retrieved: 2026-10-02T18:53:57.424ZOpen source
  2. Loop FeesLightning Labs

    Service, chain and routing fees must be included when evaluating a swap.

    Locator: Loop Out: Estimated fees, Actual fees; Loop In: Estimated fees, Actual fees · Version / scope: Pinned Lightning Labs documentation revision; LND/Loop implementation scope · Retrieved: 2026-10-02T18:53:57.455ZOpen source
How this article was made

Research and drafting use AI assistance. A separate automated review checks claims against primary sources; no external expert or named human review is implied. Publication, substantive editing, source retrieval and verification are recorded separately. This version was independently checked by an automated reviewer on 2 October 2026.

Editorial method and corrections

Degrees of Satoshi editorial project. “Lightning submarine swaps: moving between channels and on-chain funds.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/lightning-submarine-swaps/